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Hello Peter Anthony Hovis,

Wall Street is Digging into Risk Now

The monthly jobs report came in yesterday, and the economy added fewer jobs than forecast in December. The unemployment rate fell to 4.4%. The data was not too cold nor too hot.

The Federal Reserve is unlikely to cut interest rates this month, but the report will likely keep future interest rate cuts on the table.

(Source: Bloomberg / Bureau of Labor Statistics)

The market liked the report. The Nasdaq jumped 0.82% as traders believe the economy is starting to accelerate. Shipping rates are rising. Auto demand is strong. The unemployment rate fell. These might be a sign of a healthy economy.

President Trump may have ignited the bullishness by announcing a new plan to support the housing market.

Plus, Trump’s stimulus package is set to kick in soon.

The market is seeing lots of positive catalysts that could kick-start the economy, and investors are loving it.

“It really doesn’t work to be overly defensive,” said Julie Biel, portfolio manager at Kayne Anderson Rudnick. “There’s too much sugar coming into the economy.”

Of course, there are some skeptics.

Michael O’Rourke, chief market strategist at JonesTrading, thinks the market may be too speculative. He pointed out that Intel soared 10% just because the CEO met with Trump as one example.

“You have Intel up 10% and registering new highs because the CEO met with the president,” said O’Rourke. “On a daily basis stocks are rising 10% to 20% on tertiary news developments or the recycling of themes that have been playing out for months.”

Russell 2000, the index of small-cap stocks, skyrocketed in the last few trading sessions. Speculative assets also followed. Meme stocks caught fire. Junk bonds also surged. In short, Wall Street is digging into risky assets.

(Source: Bloomberg)

Sameer Samana at Wells Fargo Investment Institute said the economy is indeed doing well but is not so sure about small-caps that were red-hot lately.

“The broadening is justified given the better economic data, especially with respect to more sectors and countries across the world performing well,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. “We are still a little skeptical on going too far down the market-cap stack.”

Nathan Thooft at Manulife Investment Management believes there’s more room for stocks to rise. Why? Stronger economy. US services activity expanded in December at the fastest pace in more than a year. Labor productivity jumped at the fastest pace in two years. AI chip orders remain high.

As the icing on the cake, monetary stimulus and tax refunds could accelerate the economy even further.

“Accommodative monetary policy along with robust fiscal support continues to provide a favorable backdrop,” said Nathan Thooft, chief investment officer at Manulife Investment Management.
“We are expecting economic activity to improve in the second quarter and beyond in 2026 driven by the previously mentioned drivers, the lag effect of monetary stimulus, and tax refunds benefiting the lower income cohort.”

The Undisputed Leader in Transplant Intelligence

Today’s Stock Pick: CareDx, Inc (CDNA)

It is tough to be a transplant recipient.

It would mean a daily existence defined by the quiet, nagging fear of rejection. For decades, the only way to silence that fear was through invasive, painful biopsies that often caught problems too late.

CareDx was built to make the process more seamless for patients.

It is almost like the central nervous system of the transplant ecosystem.

CareDx has moved beyond simple diagnostics and has built a “moat” around the patient journey. Their flagship innovations (AlloMap and AlloSure) have become the standard of care, acting as an early warning system that detects organ rejection long before physical symptoms appear.

(Source: CareDx)

This is important.

There are scarcity of available organs, so it is critical for patients and clinicians to make sure that the patient will be able to accept the newly transplanted organ. CareDx’s products test the patient’s body to see if it will accept or reject the newly transplanted organ. Services include transplanted kidneys, hearts, and lungs.

CareDx also offers services beyond testing for matching doctors and monitoring the health of transplanted organs.

For example, its mobile phlebotomy team can meet the patient after the transplant for post-transplant surveillance blood testing. It also offers a free app to manage medications, track vital signs and so on.

Its flagship product, AlloMap, tests if a patient is at risk of rejecting a transplanted heart is used by over 90% of hospitals that perform this procedure. Its AlloSure blood test (for kidney transplants) is used by over 70% of hospitals that do kidney transplants. Other products also saw high adoption rates.

Clearly, the company dominates in what it does.

Its testing volume exploded from 16,000 tests processed in 2017 to 165,700 in 2023, a ten-fold increase. Revenues jumped from $77 million to $280.3 million in 2023.

But the real story for investors isn’t just the technology; it’s the dominance of their data.

(Source: CareDx)

With the 2025 launch of HistoMap Kidney and the validation from their landmark SHORE study, they have cemented their position as the undisputed leader in transplant intelligence, using AI to turn biological signals into actionable clinical decisions.

A strong quarter: The company just reported its quarter with a 21% year-over-year revenue growth. Testing services volume jumped 19% year-over-year.

(Source: CareDx)

Lastly, it raised 2025 guidance for annual revenue to $372 to $376 million, a projected ~12% growth from last year.

(Source: CareDx)

Bottom line: CareDx operates in a growing market for organ transplants. Its market dominance positions the company to generate strong results while the industry grows. It is a wonderful place to be in. So, investors should start paying attention to this company.

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